In “The Surprising Truth About American Generosity,” the editors of Trends magazine provide a more positive perspective than I have been inclined to adopt, warn about government policies that may damage Americans’ charitable urge, and suggest some unusual reasons to give if you’re not giving now:

According to The American magazine,¹ . . . [c]haritable donations have consistently risen faster than the GDP since World War II. Per capita GDP in the U.S. has gone up by about 150 percent during the last half century. At the same time, charitable donations have risen by almost 200 percent. . . .

Per capita, the people in the United States are perhaps the most generous in the world, as measured by what they give. In 1995, we gave three-and-a-half times more than the French, seven times more than the Germans, and fourteen times more than the Italians. Americans donate more of their time as well — 15 percent more than the Dutch, 21 percent more than the Swiss, and 32 percent more than the Germans. Those figures are adjusted for education, income, age, sex, and marital status. In other words, the American level of giving cannot be explained by saying that Americans simply have more money and time to give.

Neither can it be explained by tax laws that favor charitable donations. In fact, the U.S. [JAH: "the U.S."??? Or "American citizens"?] paid out, in effect, $37.2 billion in 2002 as a result of people deducting donations from their tax returns.

All well and good. But, say the authors,

[U]pon closer analysis, we find that tax policy has little to do with the high level of donations in the U.S. Only a third of Americans itemize deductions on their tax returns. As reported in Who Really Cares?² a 2006 scholarly study by Arthur C. Brooks, professor of business and government policy at Syracuse University, research consistently shows that almost no one is motivated to give only because of the tax consequences.

Oh! Now wait a second! That’s a pretty major qualifier: “only because of tax consequences”! Who is motivated to do any only because of one thing?

But let us continue:

Brooks’ in-depth research . . . shows that the people who give tend to give a lot, as well as to donate their time and to behave in a generally more charitable and generous way in informal settings. A nationwide survey in 2002 showed that those who donate to charity are three times as likely to give money informally to friends — and even strangers. They are twice as likely to donate blood, and they are significantly more likely to give up a seat on a bus to someone else.

People who attend a place of worship at least once a week are 25 percent more likely to give to charity and 23 percent more likely to volunteer than those who don’t. They also give more. Religious people on average donate $2,210 a year, compared with $642 a year for non-religious people. They also volunteer 12 times per year on average, compared with 5.8 times for secular respondents.

Those donations were not just to churches. Religious people gave 46 percent more money to family and friends in 2002 than nonreligious people. Surprisingly, although America’s rich are very generous, it turns out that low-income working families give more, as a percentage of their own income, than anyone else. On average, rich families give about 3 percent of their income, middle class families give about 2.5 percent, and low-income families give away 4.5 percent (largely due to religious injunctions).

I will say that none of this, so far, surprises me. However, what follows did raise my eyebrows:

One possible explanation [for these behaviors] is contained in recent research published in the Journal of Consumer Research.³ It shows that people tend to give more money when they perceive that someone is in trouble [not surprising], and that in turn enhances their self-esteem. Although, one way to account for the difference between European and American giving habits lies in the fact that Europeans pay much higher taxes that redistribute wealth in the form of social welfare programs. As a result, Europeans feel as if they have already given.

–Emphasis added–JAH

Uh-oh! As you read those comments, does a little bell go off in your head? It does in mine! –What impact will the new “take-from-the-rich-and-give-to-the-poor” policies being put in place by the American government have on charitable donations going forward?

“A number of other intriguing findings are contained in the recent research,” say the Trends editors.

For example, neuroscientists have found that charitable giving changes brain chemistry and produces a feeling of euphoria. Psychologists have even coined a term for it: the helper’s high. When someone gives, especially when it involves a real sacrifice, the brain releases hormones called endorphins, which are a natural form of opiates.

Another compelling finding is that giving underpins a virtuous cycle, in which giving stimulates the economy and vice-versa. For example, when U.S. GDP rises by 10 percent, America’s charitable giving increases by 9 percent. Then, when charitable giving rises by 10 percent, America’s GDP rises by another 3 percent. The two work synergistically to create a healthier economy. That translates to an interesting equation: If a private citizen gives $1, it ultimately ends up increasing GDP by $15.⁴ To put it simply, charitable giving by individuals is much more beneficial to our economy than government programs designed to redistribute wealth.

–Emphasis added–JAH

I’m not sure how the researchers who came up with these calculations can demonstrate cause and effect, but the idea is intriguing!

The editors of Trends make some additional comments about the virtuous relationship that different if theoreticians have proposed between capitalism and charity, but the final observation I wanted to share here comes at the end of the article:

In his book, Man’s Search for Meaning,⁷ Viktor Frankl, a famed psychiatrist who survived imprisonment in Auschwitz during World War II, wrote, “The more one forgets himself — by giving himself to a cause to serve or another person to love — the more human he is and the more he actualizes himself.” Frankl formulated this hypothesis at Auschwitz, where he saw that the survival rate among prisoners was much higher for those who had a purpose other than their own survival. . . .

Using a complicated mathematical algorithm, Brooks found that . . . in the year 2000, every dollar given to charity correlated with an increase in income of $4.35, $3.75 of which was directly caused by donating the dollar to charity. Moreover, each dollar of additional income that the person earned motivated that person to give an extra 14 cents more. By that measure, charity represented a far better investment than the stock market over the past several decades. . . .

In 2004, when an American, on average, earned $100 more in income, he gave on average an additional $1.47 to charity. The net result, as this money rippled through the economy, was that each dollar given away resulted in $19 more in income. So, in 2004, the $1.9 billion total increase in donations to charity resulted in an increase of $36 billion in GDP.

So much for the “news” about Americans and charity.

When Trends reports this kind of “news,” it also seeks to make predictions for the future. And so they offered two forecasts. The first capitalized on the observation I made above about how government can squelch people’s charitable impulses:

[I]n the next few years, charitable giving will have to compete with government policies that favor bureaucratic wealth redistribution and the counter-productive regulation of charitable organizations. As Western Europe shows, when government redistributes income, it has a chilling effect on people’s motivation to give. Even worse, government policies can prevent charities from being truly cost-effective; just consider rules that prohibit charitable drug rehabilitation clinics from using volunteers and requiring them to use state-certified drug counselors. Or consider an example in Portland, Oregon where onerous legal requirements mean that it costs an individual $1.50 to donate one dollar to a public school. . . .

The second forecast began with an observation:

[N]ew organizations are forming that seek to create philanthropists at an early age. A nonprofit organization in New York City called Common Cents encourages students to collect pennies from family and friends and fill sacks with them. When a group of students has collected $1,000, they collaboratively decide which charity should receive the money. This helps cement students’ relationships with their communities and encourages them in a lifelong habit of giving, which should result in greater personal and general prosperity.

And the final conclusion?

As such organizations proliferate, they will create a society of donors that will enrich the lives of everyone.

I am not so sanguine in my perspective. But I sure would like more people to hear about the virtuous cycle related to charitable giving.

References

¹ The American, March/April 2008, “A Nation of Givers,” by Arthur C. Brooks. –Return to story.
² Who Really Cares: The Surprising Truth About Compassionate Conservatism — Who Gives, Who Doesn’t, and Why It Matters by Arthur C. Brooks is published by Basic Books, a member of the Perseus Books Group. –Return to story.
³Journal of Consumer Research, October 2008, “An Empathy-Helping Perspective on Consumers’ Responses to Fundraising Appeals,” by Robert J. Fisher, Mark Vandenbosch, and Kersi D. Antia. –Return to story.
⁴Op. cit., Arthur C. Brooks. –Return to story.
⁷Man’s Search for Meaning by Viktor E. Frankl is published by Beacon Press. –Return to story.

(No Ratings Yet)

 Loading ...

 |  Email This Post  |  Print This Post  |  Subscribe to It!
This entry was posted on Wednesday, March 4th, 2009 at 2:44 pm and is filed under charity, news. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.